document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1199104>Question 1199104</A>: <I><SPAN STYLE=\"word-break: break-all;\"> A car insurance plan pays $15,000 for a stolen car, $8,000 for a broken<BR>\n" );
document.write( "car, and $5,000 for a damaged car. In the NY State every year, 2% of cars are<BR>\n" );
document.write( "stolen, 5% of cars are broken, and 10% of cars are damaged.<BR>\n" );
document.write( "Part a) What is the expected mean annual payment to a client μ? <BR>\n" );
document.write( "Part b) What is the expected standard deviation of the annual payments to clients<BR>\n" );
document.write( "σ? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #832839 by </B><A HREF=/tutors/aboutme.mpl?userid=ikleyn><B>ikleyn(52803)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=ikleyn><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=ikleyn><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=832839\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> .\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;My response consists of two parts.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "(1) &nbsp;&nbsp;First part is to say that the problem is worded / posed / formulated &nbsp;INCORRECTLY.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "**********************************************************************\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because one client may have more than one car,\r<BR>\n" );
document.write( "\n" );
document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and we even don't know, &nbsp;how many cars an average client does have.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "**********************************************************************\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "The correct question, &nbsp;instead of &nbsp;(a), &nbsp;should be \r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "<PRE STYLE=\"white-space: pre-wrap; white-space: -moz-pre-wrap; white-space: -pre-wrap; white-space: -o-pre-wrap; word-wrap: break-word;\">\r\n" );
document.write( "    a) What is the expected mean annual payment to a client per each one single care ? \r\n" );
document.write( "</PRE>\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "(2) &nbsp;&nbsp;If you agree with this re-formulation, &nbsp;then here is the second part of my post, \r<BR>\n" );
document.write( "\n" );
document.write( "&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;which is the solution and the answer to this re-formulated question:\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "<PRE STYLE=\"white-space: pre-wrap; white-space: -moz-pre-wrap; white-space: -pre-wrap; white-space: -o-pre-wrap; word-wrap: break-word;\">\r\n" );
document.write( "         Expected  mean annual payment to a client per each one single care is\r\n" );
document.write( "\r\n" );
document.write( "             E = 0.02*15000 + 0.05*8000 + 0.1*5000 = 1200 dollars.     <U>ANSWER</U>\r\n" );
document.write( "</PRE>\r<BR>\n" );
document.write( "\n" );
document.write( "Solved.\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );